‘Many African countries not ready for AfCFTA implementation’

AfCFTA ratification barometer Source: Tralac

Despite receiving necessary ratifications needed for execution, the African Continental Free Trade Agreement (AfCFTA), having become a binding international legal instrument, may not be implemented soon, as many nations move to address critical parts of the agreement.
   
Citing the non-readiness of many African countries for the implementation stage that is expected to kick off later this year, the President of the Lagos Chamber of Commerce and Industry (LCCI), Mrs. Toki Mabogunje, noted that it took the European Union a long time to create a Union that has stood the test of time.
 
The operational phase of the agreement is expected to be launched in July this year at the Africa Union summit.
  
While meeting the minimum ratifications does not mean immediate commencement of implementation of the agreement, it is the penultimate step towards implementation.
    
The agreement is still subject to negotiations on a number of implementation aspects and modalities.
  
Mabogunje in a chat with The Guardian, said: “I do not think any African country is ready for the AfCFTA. I think when you want to do regional integration like this, it is the spirit, passion and the will to do it that is important, because I lived through the European Union (EU) being formed, and it was not easy at all for all of them to get together.
 
“They started as a really small group and later started to expand over time. I do not think anybody is ready; but I think that if we have the will to make it happen, we should all work hard at making it happen. There will be conflicts, disagreements, problems, but we have to make it work”.
  
Recall that Xenophobic acts and use of non-tariff barriers have increased since the ratification of the trade deal, setting its implementation back, with many countries reviewing extant rules on the movement of people and goods.
  
Nigeria, for instance, had since last year, closed its land borders in efforts to check the smuggling of goods from neighbouring countries.
 
Indeed, the extent to which the AfCFTA will reduce intra-African trade barriers is largely linked to the ongoing negotiations, including countries’ schedules of tariff concessions and services commitments, rules of origin, investment, intellectual property, competition, and possible protocol on e-commerce.
  
Specifically, national legal regimes must also be updated to reflect interstate agreements. International trade agreements are not self-executing; they are implemented through domestic measures such as new customs procedures and domestic regulations for Foreign Service providers and investors.
   
Similarly, stakeholders in Nigeria’s real sector have identified the need for the country to address its market challenges, to realise the benefits of the historic agreement.
  
The AfCFTA Forum, which held in Lagos, brought together representatives of the private sector, key government institutions, and experts, who highlighted among other things, the need for the country to conduct a gap analysis on its readiness to the AfCFTA for a successful implementation of the agreement.
  
Indeed, discussions revolved around the issue of implementation and capacity constraints within which governments have to operate.
  
They highlighted that the Nigerian economy was faced with challenging domestic realities, which need to be overcome to ensure that the private sector is able to compete under a liberalised African market. These challenges include high-interest rates, corruption, unreliable power supply, and inadequate infrastructure.
   
Participants pointed out that a study conducted in Nigeria had indicated clearly that the cost of doing business and physical infrastructure were some of the key priority areas that needed to be addressed by the government as the clock continues to tick towards AfCFTA implementation.
  
Small to medium scale enterprises, they agreed, should be capacitated with awareness and sensitisation workshops being held on what the AfCFTA is, with emphasis being put on what can be done to enter regional and global value chains.
 
According to industry observers, the implementation of the trade deal will be incremental.
  
There will be one overarching trade arrangement, but specific commitments and opportunities will depend on the detail contained in the respective schedules. The private sector (the real traders) will need access to the correct information.
 
The negotiations for the AfCFTA protocols on trade in goods and services are well-advanced, but tariff schedules, rules of origin, and specific services sector commitments remain outstanding. The AfCFTA envisages liberalisation and integration of the services market. Priority sectors are transport, communications, financial services, tourism, and business services.

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